Deutscher Gewerkschaftsbund

Jul 17, 2015

Eurozone: Grexit averted, cuts continue

Even though the Greek government and its creditors did ultimately sign an outline agreement for the next three years, the long-term problem has not been resolved. As was the case with earlier negotiations, it has at best bought time for the government.

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Averting a Grexit was a good thing

A Grexit would have created a far weaker, new Greek currency that would have been used to pay wages, pensions, and social transfers. It would have greatly increased already widespread poverty and a humanitarian disaster. The eurozone, too, would have been vulnerable to disintegration in the event of a Grexit.

But austerity policies remain unabated

The creditors made it clear, however, that they would accept no alternative to the disastrous austerity policies adopted across Europe. Overall, the heightened scale of cuts will further stifle the Greek economy. That’s why counteraction is now necessary: the agreement between Greece and the (European) institutions makes 35 billion euros available to the country in structural funds – money that Greece could previously not draw on because it was unable to pay its share of co-financing. Co-financing must now be completely abandoned, the 35 billion euros must be used directly for economically stimulating, socially equitable measures without delay, and sound investment must be the priority over the long-term.

Extract from the “klartext” DGB newsletter, issue 28/2015


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